Flextronics to shut Malaysian assembly plant: some 1,400 jobs in the balance

Business TimesMar 12, 2009

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Flextronics International, one of the world's largest contract manufacturers, is shutting an assembly facility in Malaysia and laying off 1,382 workers at the end of the month, according to Malaysian government sources, reports Business Times.

FLEXTRONICS International, one of
the world's largest contract manufacturers, is shutting an assembly facility in
Malaysia
and laying off 1,382 workers at the end of the month, a government official
says. According to a Reuters report, a spokeswoman from the retrenchment operations
centre of the Ministry of Human Resources said Flextronics had notified the
ministry that it intends to lay off 1,382 workers from its assembly plant in
Shah Alam. All employers in Malaysia
are required to notify the ministry before they implement job cuts. "The company reported that it was laying off the employees as it was
ceasing operations at its facility in Shah Alam," the spokeswoman told
Reuters. A Flextronics
official declined to comment when contacted about the matter.

Factories in Malaysia
have been hit hard by wilting demand for the country's key technology exports. In December, Malaysia
reported a 14.9 per cent fall in exports from a year ago, the steepest drop in
seven years. A total of 15,000 jobs were lost in January, according to government data. Meanwhile, it is reported that Flextronics may lay off some 300 employees at
its facility on mainland Penang where over
5,000 people are hired. Business Times has learnt that the company may reduce its workforce if its
other cost-saving measures were not successful. "So far the company has already instituted cost-cutting measures by
putting freeze on recruitment and reducing working hours. "The layoff in Penang is a likely option
which is being looked at," an industry source said.

It is not known whether the Flextronics intends to carry out a voluntary
separation programme although the company has already contacted the state
labour authorities.
When contacted, Flextronics Asia senior director of corporate marketing and
communications Valerie Kurniawan said: "We are not able to pass any
comments except the fact that Flextronics will align its operational
strategies, including location decisions and resources with customer
requirements."

Flextronics, which boasts a global presence in over 30 countries on five
continents, is one of the world's largest manufacturers of mobile phones,
printers, high-end third-generation phones and other high tech wireless
devices. It helps customers to design, build, ship, and service electronics products.
Its global customers include Sony Ericsson, Xerox, HP and Motorola.